from pre-purchase to repurchase: the role that technology ... · white paper technology automotive...

W H I T E P A P E R

Technology

A U T O M O T I V E

From Pre-Purchase to Repurchase:

The Role That Technology Plays in the Automotive Customer LifecycleUnderstanding and responding to the key lifecycle stages of today’s digital consumer enables automotive companies to improve the customer journey and strengthen business outcomes.

2 ©2015 TeleTech Holdings, Inc. - All rights reserved.

W H I T E P A P E R

Executive SummaryConsumers have dramatically changed how they research and shop for new cars and trucks. They now spend nearly 12 hours online comparing prices, product features, and other factors that weigh into their purchasing decisions and just 3.5 hours offline visiting dealerships, according to research conducted by AutoTrader Group. Compare that to 11 hours online and seven hours offline in 2011.

“The interactive revolution that has empowered consumers across all categories has empowered automotive customers even more,” says Don Peppers, founding partner of Peppers & Rogers Group. “The digitized automotive customer journey is creating extraordinary opportunities for automotive companies to use a variety of digital tools to engage with customers during different stages of the customer lifecycle and to deepen relationships,” says Peppers. This includes the use of predictive analytics tools to anticipate and identify customer needs and preferences as they progress across different phases of the customer journey.

By mapping each customer interaction within and across channels, automotive companies can prepare relevant customer interaction strategies at each point of the customer journey—from awareness, research, and purchase to onboarding, support, and retention. Gaining the ability to proactively reach out to customers during their path to purchase with pertinent messaging can allow automotive companies to establish relationships with prospects, strengthen connections with existing customers, and enhance the customer experience while improving business outcomes.

Facilitating the Digital Customer JourneyHistorically, the customer journey in the automotive space followed a linear process in which customers conducted specific steps in the buying journey, from recognizing the need to making their purchases. They began their searches with a wide range of vehicle types and brands to consider and gradually narrowed down their choices by reaching out for information directly from the dealerships that sold the brands piquing their interests.

But as customers have increased their reliance on the use of digital tools, the customer journey is no longer quite so sequential—most car buyers use a mix of independent research sites such as Cars.com and Edmunds.com, manufacturer and dealer websites, as well as social recommendations from friends and trusted advisors.

Consider the following automotive customer buying trends:

• Fifty percent of car buyers are influenced by independent research sites while they’re also swayed by the use of search engines (49 percent), manufacturer websites (46 percent), and dealer websites (42 percent), respectively, according to a 2014 study conducted by Cars.com and C+R Research.

• The use of digital channels is having a profound impact on buyers’ behavior. Although 70 percent of Millenials

The Role That Technology Plays in the Automotive Customer LifecycleUnderstanding and responding to the key lifecycle stages of today’s digital consumer enables automotive companies to improve the customer journey and strengthen business outcomes.

The digitized automotive customer journey is

creating extraordinary opportunities for

automotive companies to use a variety of

digital tools to engage with customers during different stages of the

customer lifecycle and to deepen relationships.

— Don Peppers, Founding Partner,

Peppers & Rogers Group


W H I T E P A P E RT H E R O L E T H A T T E C H N O L O G Y P L A Y S …

are undecided about which make and model to purchase when they begin their research, the same percentage of Millenial shoppers end up purchasing the same make/model they have in mind once they reach the dealership, according to AutoTrader’s 2014 Automotive Buyer Influence Study.

• Consumers have also dramatically increased their use of multiple devices such as smartphones and tablets in their buying journeys. AutoTrader reveals that 32 percent of consumers used two or more devices for car shopping in 2014 and forecasts that this number will skyrocket to 80 percent by 2020.

Clearly, car shoppers are considerably more informed when they walk into a dealership. “By the time consumers do a test drive, they know what they’re willing to pay and the exact models they want,” says Jeff Gossman, vice president of sales and marketing at Humanify, a wholly owned subsidiary of TeleTech.

Revving the engagement engineWhile consumers are finding troves of information about vehicle specifications along their paths to purchase, buyers will still have questions and require contact with dealer salespeople, customer care associates, and other employees in the customer care continuum, notes Jonathan Gray, vice president of marketing at Revana, a TeleTech company. This is creating enormous opportunities for automotive companies to use technologies to better understand what stage an individual customer is at in his journey and to reach out to him with relevant messaging.

For instance, the use of an integrated sales and marketing platform can draw contextual data from a consumer’s online interactions and their expressed vehicle interests. These behavioral insights can then be used to provide the consumer with a persona-driven ad that brings the consumer to an optimized landing page. Once there, the automotive company can capture the keywords and website pages the consumer searched and that information can be used for routing, scripting, and personalized offers.

By identifying the make and style of car a prospect may be interested in, a dealer can also provide a consumer with a link that provides him with a virtual test drive via rich media and video.

If the customer decides to call or chat with someone from a dealership, the behavioral information that’s gleaned from his website activity can then be automatically matched and forwarded to a salesperson who has expertise in the type of vehicle the customer has expressed an interest in (e.g., luxury sports car).

The salesperson can also use an integrated sales and marketing platform to obtain a predicted conversion rate based on each customer’s journey that compares similar behaviors and traits the customer shares with other customers who have purchased the same type of luxury sports car.

“Assembling all of the information from the various channels that customers are using is an effective way to obtain a single view of each customer and to deliver the right messaging at the right time,” says Gray.

By gathering, analyzing, and acting on the behavioral information that automotive customers share in their journeys, the transition to interacting with a dealer salesperson can be made seamless for the customer. Meanwhile, having the full history of a customer’s touchpoints and interactions can also be used to help the customer feel that his evolution from awareness to research to purchase and onboarding is all being handled by the same person.

Automotive customers don’t want to encounter hassles in any of the steps they take to purchase a vehicle. Arming dealer salespeople, contact center associates, and other customer-facing staff with relevant information about each customer can enable employees to provide intelligent support that strengthens the customer experience while improving the likelihood of conversion.

In the next section of this white paper, we’ll examine how a deeper understanding of the customer journey, aided by the use of customer journey maps and data-driven analytical technologies, can enable decision-makers to



identify and act on key stages of the customer lifecycle, including the post-purchase customer experience.

Staying ConnectedAlthough consumer behaviors vary, the endurance and reliability of many current vehicles often results in owners holding on to vehicles for several years. According to a

2014 study conducted by Experian Automotive, the average length of vehicle ownership in the U.S. is 93 months or nearly eight years.

However, longer ownership doesn’t necessarily translate into greater loyalty. The longer a customer owns a vehicle, the less likely they are to purchase that same brand again. The Experian study

attributes this to a number of causes, including changes in the brand’s lineup, changes to the consumer’s budget or credit score over time, and an increase in the probability of the customer defecting to a competitor due to the time between dealer interactions.

New car purchases typically involve scheduled maintenance appointments at regular mileage intervals which represent additional opportunities to engage with customers and to strengthen loyalty. However, these and other potential post-purchase engagement opportunities are often squandered or under-utilized once a customer has been converted. These interaction opportunities include alerting customers to new models being introduced that may interest them, sharing recall notifications and sending proactive maintenance alerts—all of which can be used to deepen post-purchase customer relationships.

“There’s a great deal of insight that can be gained by engaging with customers after the sale,” says Peppers. He points to a friend who saw an alert on the dashboard of a vehicle he’d just purchased indicating that the car’s oil pressure was low. Using telematics information the dealer received from the customer’s car, the dealer sent Peppers’

friend an email that same day identifying the problem and asking when it might be convenient for him to bring his car into the dealership for service.

“Providing this type of proactive service can demonstrate that the dealer has the customer’s back, which can help to strengthen customer trust and boost satisfaction and loyalty,” says Peppers.

Putting yourself in the driver’s seatA good starting point for identifying and understanding customer expectations at each stage of the journey is the development of a customer journey map. Using customer data, decision-makers can create personas for target customer groups and identify what experiences are most important to customers in each stage of their journey.

“Without a journey map, it’s very difficult to execute on customer expectations,” says Gossman. Plus, the use of a customer journey map can enable automotive executives to identify process breakdowns that occur between sales, service, customer care, and marketing.

A multichannel technology platform that can draw contextual information about a customer’s behaviors and communications preferences can also be a vital asset for maintaining timely and relevant post-purchase engagement.

For example, a car dealer can analyze telematics data to determine that a customer’s vehicle is about to reach 30,000 miles and that coolant, power steering, and transmission fluids are due to be flushed out and replaced. The dealer can then send a notification to the customer’s mobile phone to remind her that it’s time for the 30,000 mile service along with a discounted offer for the maintenance work.

These types of data-driven customer notifications can help strengthen satisfaction and loyalty. A study of 1,500-plus automotive customers across 10 countries conducted by Cisco reveals that 74 percent of respondents would allow their driving habits to be monitored in order to save on insurance or maintenance costs.

“What we see post-purchase is that there are certain events that will influence your decision whether to purchase again,” says Gossman.

By the time consumers do a test drive, they know what they’re

willing to pay and the exact models they want.

—Jeff Gossman, Vice President, Sales and

Marketing, Humanify



Arming customer-facing employees with a comprehensive view of each customer, along with the support and services they’re most interested in, can enable automotive companies to maintain and improve engagement and improve loyalty.

Case Study: A Proactive, Data-Driven Approach to Lease LoyaltyChallenge: A global auto manufacturer sought to improve the retention of existing customers nearing the end of their leases.

Solution: TeleTech started by building an integrated CRM system that enables a higher level of personalized customer service and support. Insights that are collected from each customer’s entire purchase, service, and dealer history are used to build deeper engagement with customers as they approach the end of their leases. This includes proactive and personalized offers that are intended to transition pre-approved customers from their existing leases into contracts for new vehicles. Continuous analysis of the results is used to identify the ‘sweet spot’ for when customer response is strongest.

Results: Within two months, the auto manufacturer’s associates generated 1,859 new sales resulting in $10 million in incremental profit. Contacted customers were shown to be 50 percent more likely to sign a new lease

than those who were not contacted. Since its launch, the lease loyalty program has resulted in more than 11,000 new sales and $65 million in incremental profit.

Getting StartedAs automotive leaders endeavor to deepen their understanding of customers as they pass through different stages of the purchasing lifecycle, it’s important to understand why a particular customer is in the market for a certain type of vehicle. The customer may be looking to improve fuel efficiency or she may be interested in a new style of vehicle after having a baby.

It’s also crucial to recognize that the customer journey isn’t always a straight path. During the course of their journeys, up to one-third of automotive customers undergo “switchbacks” where they retreat into earlier stages of the journey to do research on alternative brands or vehicle models, according to industry research.

Assembling all of the information from the various channels that

customers are using is an effective way to obtain

a single view of each customer and to deliver the right messaging at

the right time.

—Jonathan Gray, Vice President,

Marketing, Revana, a TeleTech company

Analyzing the Digital Automotive CustomerAutomotive customers share reams of data throughout their journeys, from the dealer and manufacturer websites they visit for research to the service and support interactions they have with the contact center. The digital information footprints they leave behind create enormous opportunities for automotive leaders to analyze and gain a deeper understanding of customer preferences and behaviors.

Automotive managers can use customer data and predictive analytics tools to identify the next-best action to take with a customer (e.g., introducing a dealer salesperson at a certain point in the customer journey and the probability of achieving conversion).

For instance, web analytics reveals that a potential high-value customer who viewed information on a manufacturer’s website for luxury cars also viewed information regarding satellite radio service and pricing. A deeper dive can determine whether a targeted offer that includes free satellite radio service will increase the likelihood of conversion and the profit that would be garnered.

“You can then use those insights to refine your model over time,” says Gossman.



Whatever the factors may be, it’s important to recognize that each customer has unique needs. “Not every customer is the same,” says Gossman. “You need to understand what each customer’s expectations are and how to meet those expectations across each channel and at each stage of the journey,” Gossman adds.

Once a prospect has been converted, there’s also an opportunity for auto manufacturers and dealerships to use technology to do a better job of synchronizing their messaging and campaigns as a customer nears the end of her lease or has reached a certain level of equity in her vehicle. Aligning messaging strategies can ensure that the customer isn’t bombarded with disjointed communications from the two entities and alienated from the brand, says Gray.

As automotive companies look to strengthen loyalty with customers, compensation plans for dealer salespeople could be adjusted so that they are not only rewarded for

the number of vehicles they sell or lease but also for the amount of customer satisfaction that’s generated.

“One idea might be to pay a salesperson a ‘lifetime commission’ on new car sales so that any revenue generated by a particular customer in the future—whether for future car sales, service, etc.—would result in some kind of commission for the salesperson,” says Peppers. “This would give the salesperson a vested interest in the customer’s continued satisfaction and loyalty while helping the dealership retain its most productive salespeople.”

As the consumer’s path to purchase is increasingly guided through the use of digital tools, opportunities to use technology to better understand and respond to each customer’s motivations, needs, and preferences will place enterprise automotive companies on the fast track to success.

Tracking the Automotive Customer JourneyAutomotive customers use a wide range of digital content in their path to purchase, from online video to dealer and independent research websites as well as social media posts from friends and other influencers. Still, the consumer’s path to purchase constitutes a mix of both online and offline resources and is far from a linear path.

• The Internet is by far the most–used source of information among 75 percent of new car buyers.*

• On average, automotive shoppers are influenced by 6-to-7 different sources of information. While buyers are most influenced by independent research sites (50 percent), search engines (49 percent), manufacturer (46 percent) and dealer websites (42 percent), most shoppers ultimately use just 1 or 2 resources as their main go-to information sources.**

• Twenty-seven percent of car buyers who are Facebook users have used or will use Facebook as a resource while shopping for their new vehicle. Meanwhile, forty-one percent of automotive customers saw a social media post that led them to add a brand or model to their consideration***

• Automotive shoppers use multiple devices in their path to purchase. Buyers often use desktop computers to view inventory; smartphones to take pictures of vehicles and review inventory during the early stages; tablets are typically used at home to learn more about vehicles.****

• Despite their increased reliance on digital channels for vehicle information, 71 percent of automotive customers prefer to speak with a live person.*****

• Seventy-five percent of automotive customers are never contacted by dealers when they were actively looking or considering new car purchases...******

• …Yet product expertise is the most important factor (41 percent) cited by consumers during dealer consultation.*******

• Just 17 percent of automotive shoppers will purchase the same make and model they’ve owned before.********Sources: AutoTrader.com/R.L. Polk & Co.*; Cars.com/C+R Research**; Dealer.com/DriverSide/GfK Automotive***; Cars.com/Conifer Research****; TeleTech*****; Maritz Research******; McKinsey & Company*******; Cars.com/Conifer Research********



About TeleTechTeleTech, founded in 1982, is a leading global provider of analytics-driven, technology-enabled services that puts customer engagement at the core of business success. The Company offers an integrated platform that combines analytics, strategy, process, systems integration, technology and operations to simplify the delivery of the customer experience for Global 1000 clients and their customers. This holistic multichannel approach improves customer satisfaction, increases customer loyalty and drives long-term profitability and growth. From strategic consulting to operational execution, TeleTech’s over 40,000 employees speaking over 50 languages deliver results for clients in the automotive, communications and media, financial services, government, healthcare, technology, transportation and retail industries.

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